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Daycare Payroll: Employee Advance / Loan

Employee needs a short-term loan for an unexpected expense

Lillian, your employee of some 12 years, has experienced an unexpected visit to the emergency room and needs help.  She requests a loan of $150 as an advance against her next paycheck. You sympathize with her circumstances, and agree to the loan. But how do you tactfully get the money repaid in a timely manner?

In this article, we’ll explain how to issue a payroll advance using Daycare Payroll Software from Procare, and how to automatically deduct the amount from a future paycheck to repay the loan. You may also choose to phase in the repayment over several checks as needed.

How does it work?

Video: Daycare Payroll Advance

Check Claculation ButtonYou’ll use the built-in Payroll Advance feature to issue the check for the loan amount.  Just go to the Payroll Check Calculation screen, click the Advance tab, then enter the amount in the Current Advance box.

Payroll Advance Tab

Click the Summary tab where you can enter a comment for that check, then print and record it.  You will not include taxes or any other withholdings because this isn’t a paycheck, just short-term loan.

Payroll Advance: Check Summary

How does the loan get repaid?

When you issue the next paycheck Procare will automatically deduct the amount due.  If you’d like to change the amount, perhaps because the net pay is less than the amount owed, click the Withholdings tab to change the Advance Repayment amount at the bottom of that screen.

Payroll Advance: Repayment & Withholdings

Click the Summary tab to see the final paycheck. You also might add an appropriate comment, then record the paycheck.

Payroll Advance: Repayment Summary

Processing short-term employee loans is now simpler than ever – another great feature of Procare Software®.

-Doug

P.S. You may also be interested in our last article on how to add Reimbursements for Out-of-Pocket Expenses to a paycheck.

If you have questions or comments about this article (or suggestions for another article) I’d be happy to hear from you. Drop a note to doug@procaresoftware.com

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